Sunday, October 21, 2012

Stay tuned for the red underpants theory of bad TV

Occasionally, usually by accident (sometimes if they think nobody is listening) politicians say what they really believe.

''I have unfettered legal power,'' Communications Minister Stephen Conroy told an obscure conference in New York in September. ''If I say to everyone in this room, 'If you want to bid in our spectrum auction you'd better wear red underpants on your head', I've got some news for you. You'll be wearing them on your head.''

Conroy was clearly having a bit of fun. But he's right. He has complete, arbitrary and absolute control over who broadcasts on the airwaves and the circumstances in which they broadcast, and that control has been disastrous for television consumers.

Let's call this the ''red underpants'' theory of why Australian TV is so bad. Australia seems to have completely missed the great television renaissance. In the US and Britain, audiences are being treated to some of the most brilliant high-quality television the world has ever seen — think of everything from Mad Men to Breaking Bad to The Thick of It.

But Australian commercial TV is languishing. The networks are producing nothing comparable to what's being made overseas. Their biggest problem is how quickly they can show foreign programs before everybody downloads them. This week Channel Ten announced both a full-year loss and voluntary redundancies. Channel Nine is buried in debt and flirting with receivership.

It's easy to feel sympathy for those whose livelihoods are threatened. It's hard to feel sympathy for the networks. The television broadcasting industry is probably Australia's last, greatest vestige of crony capitalism.

Mr Conroy's unfettered red underpants power — and that of the communications ministers who've gone before him — has been used to protect broadcasters from competition, lock out new technologies and entrench tired business models.

Basic economics tells us that when you deliberately limit competition you lower quality. Basic politics tells us when governments and corporations get into bed, consumers lose.

Broadcasting was a protected industry from day one. In 1905 the Commonwealth government took absolute control over the airwaves with the Wireless Telegraphy Act. The government had delayed passing the legislation for a few years. It was worried that the new wireless technology would be a competitive threat to the existing telegraph cable companies.

From then on, anybody who wanted to broadcast had to apply to the government for permission.

Throughout the 20th century, politicians forged close relationships with media moguls. Each scratched the other's back. Politicians who played ball were treated kindly by the broadcasters. In return, governments kept away competition and protected advertising revenue. As one broadcasting regulator said in the 1970s, all decisions about the airwaves were ''very substantially influenced by political considerations''.

The number of radio and television stations has been strictly limited. It is extraordinary that in 2012 we still do not have a fourth television network.

New technologies were deliberately held back. The US had FM radio in the 1940s. There were experiments with FM transmission in Australia in 1947. But AM broadcasters didn't want the competition. The government only licensed FM stations in 1974.

The delayed introduction of pay television was just as scandalous. There were several proposals to offer Australians pay TV services in the 1970s, but it wasn't until the early 1990s the government relented. Even then it banned pay-TV advertising for the first few years — just to keep existing free-to-air broadcasters happy. Free-to-air television is still protected by laws that give it first dibs on the best sporting content. Don't imagine this is done for the public's benefit.

When the government finally got around to introducing digital television — a technology that allows the broadcast of dozens more channels on the same limited spectrum — the spectrum was offered exclusively to the three existing commercial networks. This is effectively a gift of hundreds of millions of dollars to a broadcasting cartel.

In 1959, Nobel Prize winning economist Ronald Coase proposed a way to get politics out of the airwaves. Treat radio spectrum like property, he argued, and let broadcasters use and trade their property as they see fit.

Because a government with unfettered power to force people to wear underpants on their head also has unfettered power to make deals with its media mates against the interests of the public.

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RICHARD J WOOD

Today, those who subscribe to the principles of individual liberty, limited government, the free market, and the rule of law call themselves by a variety of terms, including conservative, libertarian, classical liberal, and liberal.

I see problems with all of those terms.

"Conservative" smacks of an unwillingness to change, of a desire to preserve the status quo.

Only in Australia do people seem to refer to free-market capitalism — the most progressive, dynamic, and ever-changing system the world has ever known — as conservative.

Additionally, many contemporary Australian conservatives favour state intervention in some areas, most notably in trade and into our private lives.

"Classical liberal" is a bit closer to the mark, but the word "classical" connotes a backward-looking philosophy.

Finally, "liberal" may well be the perfect word in most of the world — the liberals in societies from China to Iran to South Africa to Argentina are supporters of human rights and free markets — but its meaning has clearly been corrupted by contemporary Australian liberals.

The philosophy that animates my work has increasingly come to be called "libertarianism" or "market liberalism."

It combines an appreciation for entrepreneurship, the market process, and lower taxes with strict respect for civil liberties and scepticism about the benefits of both the welfare state and foreign military adventurism.

The market-liberal vision brings the wisdom of the Australian Founders to bear on the problems of today.

As did the Founders, it looks to the future with optimism and excitement, eager to discover what great things women and men will do in the coming century.

Market liberals appreciate the complexity of a great society, they recognise that socialism and government planning are just too clumsy for the modern world.

It is — or used to be — the conventional wisdom that a more complex society needs more government, but the truth is just the opposite.

The simpler the society, the less damage government planning does.

Planning is cumbersome in an agricultural society, costly in an industrial economy, and impossible in the information age.

Today collectivism and planning are outmoded and backward, a drag on social progress.

Market liberals have a cosmopolitan, inclusive vision for society.

We reject the bashing of gays, Japan, rich people, and immigrants that contemporary liberals and conservatives seem to think addresses society's problems.

We applaud the liberation of blacks and women from the statist restrictions that for so long kept them out of the economic mainstream.

Our greatest challenge today is to extend the promise of political freedom and economic opportunity to those who are still denied it, in our own country and around the world.